Bunge and CP Foods Pioneer Greater Transparency in Shipments of Deforestation-Free Soybeans Using Blockchain Technology
Bunge (NYSE: BG) and Bangkok Produce Merchandising Public Company (BKP), a subsidiary of Charoen Pokphand Foods (CPF), have tested a blockchain traceability solution to ensure deforestation-free soybean meal shipments from Brazil to Thailand.
Three shipments, totaling 185,000 metric tons, have been successfully traced, with three more expected by July 2024. The blockchain platform tracks soybeans from farm origin to final delivery, ensuring compliance with socio-environmental protocols and offering details on carbon footprint and regenerative practices.
This initiative supports CP Foods' goal of 100% deforestation-free supply chains by 2025 and enhances consumer confidence through increased transparency. The partnership, initiated in October 2023, aims to automate supplier management and socio-environmental monitoring.
- Successful traceability of 185,000 metric tons of deforestation-free soybean meal.
- Three additional shipments expected by July 2024, totaling another 180,000 metric tons.
- Blockchain technology enhances transparency and traceability from farm to delivery.
- Compliance with socio-environmental protocols and offering data on carbon footprint and regenerative practices.
- Supports CP Foods' goal of achieving 100% deforestation-free supply chains by 2025.
- Bunge monitors over 16,000 farms, covering 20 million hectares in South America.
- 97% of the soy sourced by Bunge in Brazil is deforestation and conversion-free.
- No explicit data on cost savings or financial impact on Bunge.
- Potential risks in fully integrating blockchain technology by 2025.
- Operational challenges in monitoring both direct and indirect suppliers.
Insights
From a financial perspective, this initiative is a strategic move for both Bunge and CP Foods, aligning them with the growing trend towards sustainable and transparent supply chains. The use of blockchain technology for traceability is a forward-looking step that could potentially enhance their market position and attract environmentally-conscious investors.
Blockchain technology ensures data immutability, providing reliable and transparent records. This feature is particularly appealing in the agribusiness sector, where supply chain transparency is becoming increasingly important. By committing to deforestation-free soy, Bunge and CP Foods cater to the rising demand for sustainable products, potentially opening new markets and increasing their customer base.
Additionally, the commitment to socio-environmental criteria and regenerative agricultural practices may lower operational risks and improve long-term profitability. The ability to trace the carbon footprint and other socio-environmental data could also facilitate compliance with future regulations and enhance the companies' ESG (Environmental, Social and Governance) ratings.
However, investors should note the potential costs associated with implementing and maintaining blockchain systems, as well as the risks if the technology fails or faces widespread technical difficulties. While the initial results are promising, the long-term financial benefits depend on the scalability and acceptance of this technology by the broader market.
Overall, the initiative positions both companies well in a competitive market, potentially leading to increased investor interest.
From a technological standpoint, this partnership signifies a noteworthy application of blockchain technology in the agribusiness sector. Blockchain's fundamental strength lies in its ability to provide immutable and transparent records, which is important for verifying the sustainability claims of agricultural products. The decentralized nature of blockchain means that once data is recorded, it cannot be altered, ensuring a high level of trust among stakeholders.
The current blockchain adoption for tracing 185,000 metric tons of deforestation-free soybeans from Brazil to Thailand exemplifies its potential to revolutionize supply chain management. This technology not only enhances transparency but also ensures that socio-environmental criteria are met at each stage of the supply chain.
Integrating blockchain with satellite monitoring systems, as mentioned, could further enhance the precision and reliability of data. This synergy could enable real-time monitoring and rapid response to any deviations from sustainability standards.
While the benefits are clear, the challenge lies in scalability and the integration of blockchain with existing legacy systems. The success of such initiatives depends on widespread adoption and the seamless integration of new technology with traditional supply chain systems. Furthermore, the cost of implementation and the need for technical expertise could be potential barriers.
In conclusion, this initiative is a significant step towards leveraging advanced technology for sustainable supply chains, with promising implications for the broader industry.
From a market research perspective, this initiative aligns perfectly with the growing consumer demand for sustainable and transparent products. Environmental sustainability has become a major selling point and companies that can substantiate their claims with robust data are likely to gain a competitive edge.
The decision to employ blockchain for traceability reflects a strategic response to consumer and regulatory pressures. As sustainability concerns become more prominent, consumers are increasingly willing to pay a premium for products that can demonstrate environmental responsibility. This initiative not only enhances brand reputation but also addresses a important market need.
The partnership between Bunge and CP Foods taps into a market trend where transparency in supply chains is no longer a luxury but a necessity. By ensuring that their soybeans are deforestation-free and traceable, they are positioning themselves as leaders in sustainable practices, which could attract a loyal customer base and potentially lead to higher sales volumes.
However, it is essential to consider the potential market risks. The success of this venture hinges on consumer trust in blockchain technology and their willingness to accept its claims. Moreover, there is a need for continuous education and marketing efforts to inform consumers about the benefits and reliability of blockchain-based traceability.
Ultimately, this initiative is a proactive market strategy with the potential to set new standards in the industry, catering to the evolving demands of a conscious consumer base.
Around 185,000 metric tons of deforestation-free soybean meal were shipped from
These products comply with Bunge’s and BKP’s socio-environmental supplier verification protocols and were grown in high priority regions with zero deforestation since 2020, aligning with the cutoff date determined in the sourcing standard developed by CP Foods. In addition to compliance with different socio-environmental criteria, the platform also offers customers access to information including the carbon footprint of the volumes sold and whether the farm has adopted regenerative agricultural practices.
Paisarn Kruawongvanich, Chief Executive Officer of Bangkok Produce Merchandising stated that the company is working to connect blockchain-based traceability solutions with suppliers, partners, and farmers across the world, ensuring transparency across its supply chain. “In the initial stages of our partnership with Bunge, we have shipped the first vessels of soybean meal verified deforestation-free, fully traceable from farms to their destination in
“Adding a layer of blockchain technology improves the transparency in end-to-end traceability that Bunge has been doing for some years. This ability to increase end-consumer confidence in soy projects is only possible thanks to the robust supplier’s socio-environmental verification and monitoring system that we have structured over the last decade, which uniquely positions us to provide the connection of proven sustainable products with markets where the demand for them is increasing,” says Rossano de Angelis Jr., Bunge’s Vice President of Agribusiness in
The two companies have been collaborating since October 2023, when they announced a partnership to develop technical, commercial and operational feasibility studies for a blockchain traceability solution aimed at building a sustainable and digitally integrated supply chain. The agreement involves oilseeds and their by-products sourced by Bunge in
The ongoing tests aim to automate the connection between Bunge and BKP’s supplier management and socio-environmental monitoring systems with a digital platform. This enables the customer to monitor and receive product traceability data, in addition to accessing socio-environmental information from the sourced farms. The blockchain technology ensures an additional layer of reliability, as it makes data immutable once it enters the platform.
For Bunge’s Distribution Director in
Since the end of 2022, Bunge's supplier monitoring system covers more than 16,000 farms, around 20 million hectares, in
About Bunge
At Bunge (NYSE: BG), our purpose is to connect farmers to consumers to deliver essential food, feed, and fuel to the world. With more than two centuries of experience, unmatched global scale, and deeply rooted relationships, we work to strengthen global food security, increase sustainability where we operate, and help communities prosper. As a leader in oilseed processing and a leading producer and supplier of specialty plant-based oils and fats, we value our partnerships with farmers to bring quality products from where they’re grown to where they’re consumed. At the same time, we collaborate with our customers to develop tailored and innovative solutions to meet evolving dietary needs and trends in every part of the world. Our Company has its registered office in
Website Information
We are routinely post important information for investors on our website, www.bunge.com, in the "Investors" section. We may use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
About Bangkok Produce Merchandising PCL (BKP)
Bangkok Produce Merchandising PCL (BKP), a Feed Ingredient Trading Business Unit of Charoen Pokphand Foods Public Company Limited (CP Foods)., aims to be a sustainable leader with a solid foundation of sustainability throughout the supply chain.
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Bunge News Bureau
Bunge
636-292-3022
news@bunge.com
Bangkok Produce Merchandising Public Company Limited
Mantana Lau
mantana.sal@bkp.co.th
Source: Bunge Global SA
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